INSURANCE & LIABILITY
People are usually little aware about moving-related insurance, as a result of which they often make poor choices.You may, in some circumstances, be covered by your existing homeowners' insurance policy; moreover, moving companies are required to assume liability for the value of the goods that they move.
However, homeowners insurance policies usually become void when you close your old house, and the basic liability cover that moving companies are bound to provide is mostly insufficient for most goods, excepting perhaps ordinary furniture and other items that have a high weight-to-value ratio.
Other options are Declared Value Protection and Full (Replacement) Value Protection. You need to make yourself aware of the amount of protection and the costs for each option, especially if you plan to transport items of extra-ordinary value.
Movers are required to provide you with information on what it will cost you to place a value on the items you want shipped. You might probably find this information in the "Your Rights and Responsibilities" section of the movers' brochure. You might even find a separate leaflet that tells you what you need to know about placing a value on your household goods shipment before you move.
Basic Carrier Liability
This is the so-called limited liability and is the minimum coverage required by law. This coverage is NOT insurance, and does not cost you any extra money.
While it is the most economical option available, your goods are covered to no more than 60cents per pound per article for inter-state moves and 30 cents per pound per article (usually) for local moves. This minimal amount of liability that must be provided to any consumer when transporting goods is called "released value".
Loss or damage settlements are based on the pound weight of the article multiplied by 60 cents. For example, if you have a 100-pound article and it is destroyed in transit, you would be entitled to a total of $60.00 for its replacement. While this coverage might be enough for some items, furniture, for example, it is obviously insufficient for items like televisions and other that have a high value-to-weight ratio.
You might probably be asked to sign a specific statement on the bill of lading if you agree to this option.
Declared Value Protection
"Declared Value Protection" enables customers to declare a lump sum value on the shipment.
The customer agrees that the declared or released value of the shipment will be the declared value or $1.25 per pound times the weight of the shipment, whichever is greater. With this option the mover is entitled to charge you $ 7.00 for each $ 1,000 of liability assumed, and the mover assumes liability for the entire shipment at an amount equal to $1.25 times the pound weight of your shipment. If your shipment weighs 8,000 pounds the Declared Value Protection is $10,000, but if you decide you want to be better protected you can declare that your shipment is worth $20,000. It only makes sense if your shipment is really worth $20,000 or more, and for that option you will pay $140 instead of $70.
This coverage is based on depreciated value of an item regardless of current replacement cost. This plan offers better protection for most goods, but might be inadequate (or very expensive) in the case of items of extra-ordinary value.
You automatically default to this option if you have not chosen any another.
Full (Replacement) Value Protection
This is the most comprehensive insurance plan available for the protection of goods in transit. Under this plan, any goods lost, damaged or destroyed during the move will be repaired, replaced or settled for in cash, at the movers' discretion.
Costs vary depending on the mover. You may be able to reduce the premium by choosing a higher deductible; however, do remember that the "deductible" is the amount of loss or repairs that you will be responsible for- if you choose a $500.00 deductible, you will have to bear the first $500 yourself in case of loss or damage.
Also bear in mind that unless you list high-value goods -jewelry, for example- on the shipping document, the movers can protect themselves from loss or damage to the same.
Extra Ordinary Value Items
High- or extra-ordinary-value items are those of value over $100 per pound. Here's a list of items that usually classify as high-value goods:
- Antiques
- Crystal
- Precious Stones or Gems
- Art Collections
- Currency
- Silver and Silverware
- Cameras
- Figurines
- Video Cameras
- Computer Software
- Furs
- Coin Collections
- Oriental Rugs
All items in your shipment that may be considered to be of high or extraordinary value must be identified and the mover must be advised of their presence in your shipment. For this purpose, a High Value Inventory sheet must be completed and signed by you prior to your move. If you fail to list all extraordinary value items and/or fail to sign it, the movers' liability for loss or for damage to those items will be limited to no more than $100.00 per pound per article, based upon actual weight.
In the event of a claim, any settlement is limited to the declared value of the entire shipment. You must declare the total value of your goods. This total should include the value of all items, including those of extraordinary value, and must be recorded on the bill of lading. Please note that the protection for items of extraordinary value is not available for shipments released on the basic carrier liability option.
Homeowners Insurance
Homeowners' insurance policies usually terminate automatically once you close on your old home. However, some homeowner's insurance policies might cover household goods while in transit. Check with your insurance company to find out what coverage you may have for your goods while they are being transported. If you are covered, ask them to explain the level of coverage and any limitations that apply.
For making a claim under a homeowners' insurance policy, you will need to prove that the loss or damage was due to mover's negligence. Here again, no payments will be made for any items damaged due to poor packing by you.
Footnotes.
Talk with your mover so you can get a clear understanding of your options and make more informed choices. Not withstanding loss or damage to your goods, you are still liable to pay for the move on time. If at all you suffer loss or damage as a result of your move you have nine months to make a claim. The mover is required to respond to your claim within 30 days and the issue must be resolved within 120 days. In the event that arbitration is chosen to resolve the issue and you are not satisfied with the outcome of the arbitration process you may sue for damages.
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